Boombustology


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Hardcover
272 pages
ISBN 9780470879467 Published March 2011
John Wiley & Sons
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Boombustology
Spotting Financial Bubbles Before They Burst
By Vikram Mansharamani 

Related Blog Posts
Introducing the Candidates: Entrepreneurship & Finance
Posted Dec. 21, 2011 2:07 a.m. by sally-haldorson
In - 800 CEO Read Blog

Over the course of this week, we will be introducing, by category, the candidates for the 2011 800-CEO-READ Business Book Awards. Even though only one of the candidates can win the big prize, good business books deserve an audience, and perhaps one on this list will be the winning book..to you.

Today, we take a look at the candidates in two categories, Entrepreneurship/Small Business and Finance/Economics.

Entrepreneurship/Small Business:

Finance/Economics:

So which book is going to win the Entrepreneurship and the Finance categories and be in the running for the 800-CEO-READ Best Business Book of 2011? We'll announce the shortlist and winner in January!

Stay tuned!



Friday Links
Posted April 2011 7:43 a.m. by dylan
In - 800 CEO Read Blog

➻ Charles Fishman, the author of The Wal-Mart effect, has a new book coming out with Free Press called The Big Thirst about "The Secret Life and Turbulent Future of Water." If you can't wait until April 12th to start in on it, you can read an article adapted from the book in Fast Company about The Business of Water. From that article:

Every gallon of water we use has an economic value—the value of whatever we can actually do with that water, whether it's brew our morning coffee, grow an acre of wheat, or make a microchip.

Yet in our homes, our schools, our companies and organizations, we typically behave as if the opposite were true. We act as if clean, on-demand water has zero economic value. Especially in the developed world, the value inherent in water is hidden under a cloak of invisibility. Although the water has indispensable usefulness, it rarely has a price.

What's often oddly missing from the conversation about the business of water is the price of the water itself. The companies that are taking water seriously today have something at risk—their inability to function without reliable water, or their reputation if they squander or damage local supplies. Some see an opportunity in persuading other businesses to try to understand their water risk.

What is so striking is that businesses that start to take the economic value of water seriously immediately start to use it and think about it differently.

Now, Fishman isn't suggesting that we turn our water resources and infrastructure over to profit-driven corporations, simply that we recognize that their is an economic value to water, and that we should value it properly.

Explaining that "The only way to understand and appreciate the importance of water to our lives is to look at the data flow," Fishman also has a fascinating infographic, illustrated by Francesco Franchi, at Fast Company about our Water World.

➻ Sticking with Fast Company here, Douglas McGray takes a look at How Carrots Became the New Junk Food. McGray's article tells the story of a second generation Coca-Cola executive, Jeff Dunn, taking his considerable skills to baby carrot grower Bolthouse Farms as its new CEO, and what's now taking place there.

Like his father, Dunn considered himself a marketing guy, which made sense for a top executive at a soft-drink company. "We were selling sugar water and fairy dust," Dunn says. "And don't forget the fairy dust."

Three years ago, he became CEO of Bolthouse. His office is across the street from an agricultural machine yard filled with tractors, seeding trucks, and 65,000-pound harvesters. It has been something of a change. Then again, there are similarities. "Carrots are basically a duopoly," he says. "It's Coke and Pepsi." And when he looked at his flagging sales, he wondered if some fairy dust might help.

To help with the alchemy of that fairy dust, they teamed up with Omid Farhang and the advertising agency Crispin Porter + Bogusky. And then something completely predictable happened:

A few weeks later, Farhang was in the California desert, with a film crew. "There's a guy in a shopping cart with a rocket strapped to it, and there's pyrotechnics lining the base of a cliff, and there's a really hot model standing next to a machine gun," he recalls, and laughs.

I won't spoil the ending for you, but it turns out that fairy dust might end up tasting a bit like cool ranch.

➻ Felix Dennis, the founder of Maxim and author of The Narrow Road: A Brief Guide to the Getting of Money (being released by Portfolio on April 14), seems to think that the fairy dust on Wall Street might be running out. In an interview with Forbes about The Mogul's Maxims recently, there was this exchange:

[Jeff Bercovici of Forbes]: Is starting a company still the best way to get rich? Haven't hedge fund managers and bankers disproved that?

[Felix Dennis]: Yes, there are certain professions, the financial sector being one of them, where you are massively overpaid. But those days—I'm not saying they've ended, but those days are ending. Anybody who goes into college now and thinks, "I'm going to join the equivalent of what Bear Stearns was, and I'm going to get rich just by loaning other people's money and taking huge plunges, and if I'm wrong I don't lose anything"—well, that might've worked in the 1990s, but it's not going to work now, brother.

Those bankers you're talking about, they're not part of a virtuous circle. They are pond life. Whatever an entrepreneur is, she or he is not pond life. They have meaning. And without wishing to sound pompous, they are part of what made America great.

I'm assuming that when he refers to "pond life," he means leeches. But, by making the blanket statement that entrepreneurs are not "pond life," he's also saying that entrepreneurs are not snapping turtles or mallard ducks—virtuous animals both—a statement I can't stand behind. (It should also probably be noted that investment banks on Wall Street helped build much of the industrial infrastructure in our country, things like railroads, certainly "part of what made America great.")

➻ Vikram Mansharamani released a book entitled Boombustology last month with John Wiley and Sons about the bubbles created by "pond life." And he wrote about Spotting Bubbles Before They Burst on Gloria McDonough-Taub's Bullish on Books blog this week. He believes that it's not necessarily the information you have that helps you spot bubbles, but the lens you look at that information through. More importantly, he thinks you need multiple lenses:

Financial booms and busts are, particularly from an a priori perspective, probabilistic events for which multidisciplinary analysis is essential. Addressing financial booms and busts through a single lens may in fact have negative impacts and lead to gross misunderstandings.

Adopting a singular perspective will lead to an emphasis on depth of data versus breadth of information. It leads to deeper and more thorough understanding of particular information, but it misses the point that information is not the essential element.

There are plenty of “dots” but the connections between them are lacking.

Conceiving of financial booms and busts as uncertain ambiguities necessitates the application of different lenses to develop a probabilistic interpretation of scenarios to better understand how they may evolve. Economists, political scientists, psychologists, and even hard scientists have much to learn from each other. What we need today are analysts who employ a multidisciplinary perspective to connect the dots.

He goes on to discuss a course he created at Yale to teach "such a methodology" and some of the very savvy predictions his students have come up with. It's certainly worth a read.

➻ Speaking of needing a lens for the information you get, Marc Mohan reviewed The Information in The Oregonion last month. He writes:

The equivalency between bits of information as the smallest unit of data and as the smallest units of existence grows clearer and clearer, until Gleick's contention that it's bits all the way down, makes a certain sense.

I'm sure it does.

➻ "Your feet upon the table are an abomination, and worthy of rebuke." (Ian Frazier reading "Laws Concerning Food and Drink; Household Principles; Lamentations of the Father" at the 92nd Street Y, forwarded to us by our sheriff, Carol Grossmeyer.)




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